In Finland the Code of Real Estate (540/1995), which came into force on 1 January 1997, includes provisions concerning the sale of real estate, liens and a registering system. According to the primary provisions of the Code of Real Estate, a real estate's bill of sale and mortgage instrument must always be in writing. According to the Code of Real Estate, a sale of real estate shall be concluded in due form, meaning that both the seller and the buyer—or their attorneys—must sign the bill of sale. Additionally, a notary must attest the sale in the presence of all the signatories of the bill of sale.
Provisions on formal requirements concerning a real estate's bill of sale are also applicable to trades and gifts of real estate. The pre-contract and cancellation of a sale of real estate shall also be concluded in accordance with the provisions on formal requirements concerning the sale of real estate. Additionally, the power of attorney for a sale of real estate shall be in writing.
Provisions concerning the sale of real estate were revised with an amendment which became effective on 1 November 2013. The new provision will permit the majority of real estate transfers to be made electronically in the trading system, the users of which can be identified in a reliable manner. This trading system is maintained by the National Land Survey of Finland. Some of the provisions will not take effect until the beginning of March 2015.
Trades shall be made in an electronic form, which will be reviewed according to data in the Title and mortgage register and a number of other official records. A notary is not used in the trading system, but the system ensures that the contents of the bill of sale correspond to requirements of the law and that real estate transfer information is transmitted directly to the various authorities from the system.
The system does not accept bills of sale that do not fulfil formality. Therefore, a bill of sale should contain the necessary terms of trade. The content requirements are the same as in the past (the intent to convey, the real estate to be conveyed, the seller and the buyer and the price or other consideration). An agreement that would be ineffective according to the Title and mortgage register cannot be concluded (for example, if the real estate belongs to the bankrupt's estate). A trade occurs when the seller and the buyer accept the bill of sale with the same content. When a sale of real estate occurs in the web service, registration of title occurs for the property automatically without the need for a separate application. Also, paper-based mortgage instruments can be replaced with electronic mortgage instruments.
The seller and the buyer are the parties in the trading system. Use of a representative requires a pre- stored authorization in the system. Individuals can identify themselves to the trading system with online banking credentials, mobile certificates, or an electronic ID card. Companies can identify themselves with Katso-identification, a free service provided by the Social Insurance Institution of Finland and the Tax Administration, which enables companies to identify themselves to different authorities' e-services. Identification also enables signing the documents.
Electronic bills of sale and electronic mortgage instruments are alternatives, not replacements, to traditional documents. The traditional methods and paper documents can still be used in real estate transactions, and mortgage applications can still be submitted in writing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.